Nation Integrates Third-Party Liability Motor Insurance

It will also make the identifying stickers posted on the windshield of vehicles with either QR codes [Quick Response codes] or identification through plate numbers easier.

The Ethiopian Insurance Fund Agency plans to develop a database in a bid to integrate all information related to third-party vehicle insurance for an estimated investment of 35 million Br.

Dubbed the Motor Third Party Liability Information System, it is expected to be launched for a trial run next year. The Agency also plans to finalise the design and development of the system this year.

The system will include various features such as insurance coverage information, emergency medical treatment, claim management, accident notification and a vehicle information database.

It will also make the identifying stickers posted on the windshield of vehicles with either QR codes [Quick Response codes] or identification through plate numbers easier. It will facilitate access to cars’ history and insurance coverage.

The system is expected to integrate medical institutions as they provide emergency medical treatment and will enable them to settle costs related to their service through the system. The accident notification feature would also allow drivers to notify authorities when incidents occur.

To implement the system, the Agency is in the process of hiring a consultant. The project will be eventually outsourced to private companies through a tender.

“We estimate the cost of designing the information system to be around 35 million Br,” said Henok Habte, Information Technology team leader at the Agency.

The consultant will design the key features of the IT system including the required physical infrastructure, products, facilities and services.

“Insurance requires a fast and continuous flow of information between the Agency, transport authorities, traffic police, medical institutions, insurance companies and claimants,” said Henok. “This is why there was a need to install a system with advanced information technology.”

There are problems with the current system, which includes cases of insurance coverage involving forgery that have been documented by the Agency. Since the system was manual information passed between different parties, it often required making requests for information through letters, which led to delays.

“There are also problems with mismatched reports as when damages and injuries reported by the police and claims requested by claimants and medical institutions vary,” Henok said.

In Ethiopia, it is compulsory for vehicles to have third-party motor insurance, which all 17 insurance companies in the country provide. Although there are 831,126 cars in Ethiopia, only 643,659 have the compulsory third-party motor insurance, which the Agency attributes to lack of documentation.

The Agency takes 10pc of all premiums paid on third-party motor insurance, which thus far has reached 390 million Br. The fund serves as a source to provide emergency medical treatment costing up to 2,000 Br and compensation to people who have sustained bodily injury, as well as family members of the deceased, in case of accidents caused by uninsured or untraced vehicles.

Last year the Agency paid compensation for damages amounting to 8.5 million Br for 299 people, sustaining losses from uninsured and untraced vehicles. The 17 insurance companies paid out a combined 209 million Br for around 3,490 people in body, life and property damages caused by insured vehicles.

“Insurance companies have been requesting the agency to set up a central database for a long time,” said Tefera Wendemu, CEO of Lucy Insurance. “A committee made up of different representatives from the insurance industry was formed to set up guidelines for the design of the system.”

Assefa Mezgebu, a public communication officer for Addis Abeba’s Traffic Police Commission agrees that this would simplify and make efficient the work of traffic police.

“But there should be training for traffic police before the system could be launched,” he said.